Peace on Procurement
DOD-GSA ACCORD RESOLVES PAYMENT DISPUTE AND PROMOTES EXCELLENCE IN ACQUISITION.
Tensions have run high at times over the years between the General Services Administration (GSA) and the Department of Defense over procurement practices. But after some contentious years that included Congressional hearings, the focus has shifted to setting various guidelines for ethical conduct that govern federal employees and contractors.
Both agencies now are working out their differences to achieve a common goal: acquisition excellence.
Culminating this effort is a memorandum of agreement (MOA) signed by Shay Assad, DoD director of defense procurement and acquisition policy, and Emily Murphy, GSA’s chief acquisition officer, late last year. It calls for DoD and GSA to share the single objective of providing best value goods and services, in a timely manner, in support of the warfighter.
The memo contains some two dozen statements outlining how this should be achieved, followed by a similar number of activity items, with timeline dates for when they should be completed.
“The MOA is a reflection of GSA’s focus on customer service and further evidence of our growing partnership with DoD,” said GSA Deputy Administrator David Bibb. “I believe this MOA sends a strong signal of each agency’s intent to work closely with one another.”
Bibb led a GSA team, chartered by Administrator Lurita Doan, to develop improved ways of providing service to DoD, GSA’s largest customer.
“Both of our agencies felt a need for the MOA,” said David A. Drabkin, GSA senior procurement adviser in the Office of the Administrator. “We [GSA] have worked very hard to get our contracting and fiscal shop in order. The MOA is one of several recent things we have done with DoD to be sure we are absolutely on the same page.”
Some of those who have closely examined the memorandum, however, said they were not overly impressed. Larry Allen, executive vice president of the Coalition for Government Procurement, referred to the memorandum as unremarkable and selfevident.
“The fact the GSA and DoD were able to initiate joint communications, however, is significant,” Allen acknowledged. “The memorandum helps to state that DoD as a team can use GSA contracts and programs. The power of this memorandum is the message it sends that it is OK for DoD to use GSA programs and contracts, and that the number-one method of distribution is going to be from contractors to their government DoD customers.”
James Krouse, director of market analysis for INPUT, recalled that his initial reaction to the MOA was that it was “peculiar.” “It is as though GSA was willing to do almost anything to maintain control over what DoD said,” he said. “Does this open a Pandora’s Box to what is going to be expected from other agencies? Could be.”
Krouse argued that the power, clout and authority of GSA will never be what it once was. “They have their own issues as far as procurement policy go,” he said. “The fact is the Office of Management and Budget [OMB] is running the show. We don’t see in any shape or form, regardless of change of administration or party affiliation, where OMB is going to make itself subservient to GSA’s programs and policies again.”
VALUED VEHICLE
Stan Soloway, president of the Professional Services Council, described the MOA as a positive step. “It codifies the relationship and makes clear to all concerned that DoD recognizes the value of the GSA contract vehicle and are encouraging the folks to use it as appropriate,” he said. “The flip side is people are going to have to jump through hoops before they can justify going through GSA schedule/contract. That may have some impact on fees.”
Trey Hodgkins, director of defense and intelligence at the Information Technology Association of America, said the memorandum was centered on GSA’s desire to attract back DoD business. “It’s a huge percentage of what they do, and they have fiscally felt the impact of DoD not using their vehicles,” he said.
The GSA and DoD have disagreed regarding the handling of funds, especially GSA’s contention that it had the authority to “park” DoD’s money.
The MOA in essence is an agreement that permits both agencies to agree to disagree about past disputes regarding GSA’s conviction that it had the authority to park funds, said Hodgkins. “The MOA defines the playing field for those people who are trying to do these acquisitions at DoD.”
Yet Neal Fox of Neal Fox Consulting argued that the MOA makes it harder for companies to do business with GSA through DoD. “The reason for the agreement is based on an attempt to placate the Office of the Inspector General [IG] and meet IG demands rather than fix issues between DoD and GSA,” he says.
Fox sees the contracting process becoming even more complicated by DoD and other agencies, since they will be inclined to create more of their own internal contracts. This, in turn, will require businesses to bid on a larger number of contracts.
“Anyone trying to sell to DoD through GSA will find it more difficult because of the onerous requirements that have been placed on the DoD contracting personnel,” he said.
In addition, there is “the water-cooler effect,” Allen said. “Most people cut to the chase and don’t bother to read how to do it. All they hear around the water cooler is what you cannot do anymore.”
At the same time, Allen maintained, DoD is not able to conduct all of its owncontracting internally. “Therefore it is really in DoD’s best interest to make sure their contracting officials understand it is OK and, in fact, necessary for them to use outside contracting methods and contract services to meet DoD measures if the agency is going to function.”
TICKING CLOCK
The big challenge remaining for GSA and DoD is a fiscal issue: When does the clock start ticking on money that is transferred from the department to GSA?
Bibb explained that while DoD has taken a more restrictive approach regarding fiscal law, GSA is going to handle the money as the department has asked. “This means that when we receive the money in a given fiscal year, we will obligate that money within the same fiscal year,” he said.
GSA officials say DoD needs to do more advanced planning and give more advanced notice regarding what is coming. That way, GSA can do preliminary work in advance such as market research for an acquisition strategy. But the jury is still out as to how the agencies will approach planning and what is required to take place to prevent the system from slowing down or causing confusion.
While hurdles remain, the MOA is making progress by establishing clear processes, participants say. “There is a series of tasks that are being developed and need to be done that should result in better consistency between our two agencies,” said Drabkin.
Among its action Items, the MOA calls for the GSA and DoD to jointly develop standardized content for interagency agreements, with an emphasis on identifying roles and responsibilities of the DoD and GSA; justifying sole source procurements; developing quality assurance surveillance plans; establishing states of work requirements;determining fair and reasonable prices; and funding of oversight/management, including the timely de-obligation of excess funds. The MOA calls for the standardization to be completed this spring.
Another MOA action item is comprehensive training both as videotape and on-line training for all GSA contracting professionals, and to remind GSA and DoD employees of procurement rules.
“We started this a year ago as part of our Get it Right Program,” said Bibb, noting that the training is ongoing.
“I believe there will be some implementation challenges to what the MOA proposes, the effect of which we do not yet know,” Soloway said. “I think ultimately there are ways to get the job done efficiently, quickly, transparently and within the lines of accountability.”
CONTRACTOR IMPACT
While contractors may have to replicate their proposals numerous times to get on the new schedule, Hodgkins predicted that over time most contractors will find they are using a smaller number of procurement vehicles. “For contractors, this means they don’t have to replicate their effort,” he said. “This will be a benefit.”
Regarding the impact the changes will have on IT and telecommunications procurement, Drabkin said he believes the MOA will provide the military with greater flexibility in meeting its business needs.
“This is because they can use GSA to leverage their own workforce in times when they have a lot of work to do themselves,” he said. “DoD also will be happier with what they get because we will have defined what they want and make sure that we deliver that to them.”
In addition, GSA has been working closely with the Defense Information Systems Agency (DISA) and the DoD chief information officer to make sure it has products and services that meet the department’s IT and telecommunications needs.
“We are also making them aware of the services and contracts that we already have rather than their having to write their own,” Drabkin added. “We have been working very closely with them for well over a year.”
GSA officials contend that when DoD and GSA have a clear statement on what to do, it becomes easier for GSA to translate what it wants contractors to do. “We freely admit that we had some severe procurement problems into 2003 and an earlier timeframe, particularly in the assisted IG area,” Bibbs said. “But we believe that with our Get It Right Program, we are very serious.” ♦
